Nokia closes the door on “Ovi”, but not on services

Nokia’s EVP and Chief Marketing Officer, Jerri DeVard, announced today that Ovi services will be rebranded as Nokia services, in a transition beginning this July and expected to continue into 2012. Each of the services under the Ovi umbrella will simply be rebranded as Nokia, with no planned disruption to the service roadmaps.

Explaining the shift, DeVard commented: “By centralizing our services identity under one brand, not two, we will reinforce the powerful master brand of Nokia and unify our brand architecture – while continuing to deliver compelling opportunities and experiences for partners and consumers alike.”

So… you’ve built one of the world’s most recognised and respected consumer brands. Mobile phones are the world’s fastest and biggest selling consumer electronics device, and your brand is on the front of more than one in every three mobile phones that gets bought.

You enter a new line of business – services – in which you’re not known as a provider, and which already has some well-known and established leaders. What brand should you use for your services, to give them the best chance of success?

The answer, I suggested when Nokia launched its new set of consumer internet services nearly four years ago, was not “Ovi”. Nor was it any other brand that was completely unknown to the public, and that bore no obvious connection to Nokia. I acknowledged that Nokia might risk damage to its brand by associating it with services that, in some cases, might fail in the marketplace.

But I also believed, and I still believe, that by launching its services under an unknown brand, Nokia made such failures more likely. “Ovi” made it more difficult for Nokia to get rapid take-up for its services, and also made it difficult for Nokia to market those services as part of a total “experience” incorporating service, content and device – because the device and the service had different brands.

Some of Nokia’s Ovi services have, indeed, been unsuccessful. For example, Ovi Share has been discontinued. Some services, on the other hand, are starting to do well. Ovi Store, for example, is showing substantial growth momentum. In April, Nokia reported that the download rate from Ovi Store had reached 5 million per day, up from around 1 million the previous year, and that the number of apps had grown eight-fold over the previous year to reach around 40,000.

Those are strong numbers – but they could have been stronger still, we believe, if the service had carried the Nokia brand.

Nokia’s former CEO Olli-Pekka Kalasvuo once said: “Services are not an interesting sideline for us; they are critical to the future of our business.” But Nokia has not played with a stake that is high enough to reflect that stated importance. It has been unwilling to maximise its chances of success by putting its brand on its services.

Companies that have, by contrast, succeeded with new services by putting their brand on them include Apple, Google and Microsoft. Nokia needed to take the same risk. Now that it is disengaging from the platform software business, it’s more important than ever that Nokia gets some momentum behind its new services line of business.

I believe that using its primary brand directly will maximise Nokia’s chances of success. It was risky four years ago, and it’s still risky – but it’s a risk that Nokia can no longer afford to avoid.

SHARETweet about this on TwitterShare on LinkedInShare on FacebookShare on Google+Pin on PinterestDigg thisShare on RedditShare on TumblrShare on StumbleUponEmail this to someone

John Delaney joined IDC in 2008 as research director of the Consumer Mobile service. In this role he is primarily responsible for research into telecoms and media services aimed at individual end users. A well-regarded industry commentator and analyst, John is a frequent contributor to the business news media and is a regular speaker at industry events such as seminars and conferences. Before joining IDC, he was a principal analyst in the consumer practice at Ovum. He has a BSc in physics from the University of Warwick.